January 07, 2012

It is being dubbed the second scramble for Africa: millions of acres of land are being snapped up by companies from Asia and the Middle East, our foreign Affairs Correspondent Jonathan Rugman reports.

Nations like Ethiopia are desperate for the investment. But critics claim it's at the expense of smallholder farmers - many of whom say they're being thrown off their land to make way for the large multi-nationals.

Think of drought-stricken Ethiopia and you might not expect to see modern machinery owned by a foreign multinational, cultivating vast farms in one of the poorest countries in the world.

The goal here is simple: to double Ethiopia's agricultural production and to make it self-sufficient. So that handouts from Britain, America and others are no longer required.

Vinay Shekar is on the front line of this agrarian revolution. He's a farm manager from India running an estate in Ethiopia. His company is called Karuturi and these 29,000 acres are a small slice of its empire - with the Ethiopians pledging almost 800,000 acres to the Indian firm so far.

Ethiopia's land is owned by its post-Communist government - and that land can't feed its people. Farming methods are medieval, with the land parcelled up among millions of small scale tenant farmers. So now the country's Agriculture Minister, Ato Wondirad Mande, is giving foreign companies like Karuturi cheap leases to revolutionise food production.

When they first came they told us an investor was coming and we would develop the land alongside one another. They didn't say the land would be taken away from us entirely. He told Channel 4 News: "We give land because we cannot produce on that land. Because of lack of capital and technology, that’s why. They open a big opportunity for employment and of course generation of taxes and other financial gain."

But farmer Gemechu Garbaba talks of loss, not gain. He’s pointing to Karuturi farmland, which he says the government took from him to give to the Indians instead.

"When they first came they told us an investor was coming and we would develop the land alongside one another,"Mr Garbaba told Channel 4 News. "They didn't say the land would be taken away from us entirely. I don't understand why the government took the land."

Mr Garbaba now grows maize on land nearby which he sublets each year from a neighbour. It is precarious, he says. He could lose his tenancy at any moment.

And at the family home his wife complains that the cattle have almost nowhere to graze because their old fields have gone.

"Since the land was taken away from us we are impoverished. Nothing has gone right for us, since these investors came," he added.

Next door Karuturi is beginning to work agricultural wonders. It runs the farm under a 50 year lease, and says it will sell most of its produce inside Ethiopia itself.

Who profits?

With their Indian manager watching them, these women say they are grateful to have a job earning just under fifty pence each per day.

Karuturi can see such good profits that it's investing nearly a billion dollars in Ethiopia. Though in an interview in 2010 the company's founder said it was shameful to accuse the firm of "land grabs" when the country's being transformed.

Sai Ramakrishna Karuturi, Managing Director at Karuturi Global, said: "Why do they need to import food? It’s a shame, I sometimes feel like it's a conspiracy - that people want Africa to remain with a begging bowl.

"Here we are creating employment, food, wealth – isn't that what Adam Smith spoke about - isn't that the reason the West is self sufficient? I don't think creating wealth is a crime."

Here we are creating employment, food, wealth – isn't that what Adam Smith spoke about - isn't that the reason the West is self sufficient? I don't think creating wealth is a crime. Karuturi MD, Sai Ramakrishna

Yet in this village hut everyone complains they have less food than before because Karuturi now farms where they once did.

Taresa Agasa helped put together a petition to change the government’s mind. But when that didn't work, he took a job as a security guard for Karuturi for 45 pence a day.

He said: "We wish we could eat three times a day. I know my children want this. But I cannot provide that. We live and survive only if we have land. And we would rather have our land back."

Ethiopia's agriculture minister claims there is no conflict with local communities and no need to provide compensation.

Yet people here speak bitterly of forced evictions, and this is just a snapshot of a story now playing out all over Africa - as multinationals strike land deals with governments desperate for investment.

The risk is colonial style plantations – with local people swept aside. In a world badly in need of more food, costing less.